Millicom's Lean Play: A Masterstroke or Overextension?

Millicom (NASDAQ: TIGO) is doubling down on its “lean” strategy—cutting costs, shedding non-core assets, and doubling down on high-return markets. Like The Conners prioritizing relatable storytelling over flashy risks, Millicom's Project Everest and tower sales have slashed expenses, boosting operating cash flow margins to 36.7% despite currency headwinds. .

The positives? Equity-free cash flow targets of $750M, a dividend yield of 10.5%, and postpaid mobile growth (+50K net adds) show discipline pays. But here's the catch: service revenue fell 6.6% as Boliviano devaluation gutted top-line growth. Competitors like América Móvil are aggressively expanding fixed-line networks, squeezing Millicom's pricing power.

Investment Verdict: A cautious buy. Millicom's focus on cash flow and deleveraging is smart, but its reliance on volatile emerging markets leaves it exposed. Stick to a small position—say 2%—and monitor currency trends. If Millicom can keep margins above 35% while expanding fiber broadband, this “lean” bet could pay off. Otherwise, it's a high-wire act without a net.

—
Action Item: Watch for Q3 updates on debt reduction and tower sales. If equity-free cash flow hits $750M, it's a green light. Below that? Proceed with caution.